Nexus shareholders warned after Seven takeover snubbed

Angela Macdonald-smith

Seven Group Holdings is headed for failure unless enough investors that have already voted against the transaction change their vote at Thursday's shareholder meeting in Melbourne.

Proxy votes cast already mean the contentious deal cannot pass, according to figures released on Wednesday by Nexus.

Nexus said more than half the shareholders who have cast a direct vote or lodged a proxy appointment had voted against the deal, which would give them just 2¢ for each share. While only 67.48 per cent of all the issued shares in Nexus have been voted, already more than 25 per cent of the total number of shares have voted against the scheme, above the level required to block it.

The mass protest vote against the transaction illustrates deep-felt anger at what Nexus shareholders believe is an inadequate offer and at a perceived conflict of interest by former chairman Don Voelte, who is chief executive of Seven.

John Hartwell, a non-executive director of Nexus who will chair the meeting on Thursday, said he could understand shareholders' disappointment with the offer but noted it was the ''best option'' before the board.

Nexus and Seven have both warned that Nexus would need to be placed in voluntary administration should the takeover be voted down, with the likelihood that shareholders would receive nothing for their stock.

Proxy advisers ISS and CGI Glass Lewis have both deemed accepting the offer is the best option for shareholders. Nexus said shareholders that do want to change their vote now have to turn up at Thursday's 11am meeting to do so. Nexus reiterated that Seven has advised it will not grant waivers of repayment obligations under the debt financing it has provided to Nexus, or provide an alternative takeover of funding proposal.

If the deal is voted down then the Nexus board will have to place the company into administration and Seven has advised it would seek to acquire all of Nexus' shares or its assets through that process.